With today's announcement of further tarriffs on Chinese goods Trump is throwing down the gauntlet on breaking the Chi-Coms unfair trading practices.
Some of you may remember when "the Gipper" squared off with the Former Soviet Union over SDI (strategic defense initiative aka "Star Wars"). Reagan promised to outspend the Bolsheviks in an arms race to Space, knowing their creaky antiquated dilapidated unworkable economy could not keep pace with a nimble, efficient, healthy Free market Capitalistic powerhouse known as the American economy.
Reagan was right, and despite Perestroika and Gorbachev's promises to outperform the American Imperialists, it was clear the failed Socialist bureaucracy could not hang. Americans went to work, our engineers got busy developing new weapons systems and soon the Communists were buried. The Soviet system collapsed under it's own weight and inablity to keep up with American ingenuity and entrepreneurial muscle.
Fast forward roughly 30 some odd years later and Trump similar to Reagan is issuing a new challenge to another group of discredited Communists...the Chinese. Those afraid of or warning of a trade war with China are chasing a false premise. China will lose and Trump knows this.
Some basic understanding of economics makes this true and the facts all line up on Trump's side. China simply cannot outlast the US in a trade war. Chinese money managers cannot afford to continue to float their debt by financing US debt (monetizing) their own because their debt is even more staggering! China essentially relies on interest payments from loans backed by demand for its manufactured goods fed by its cheap labor.
Moreover, they cannot count on an expanding economy raising wages because private Capital expenditures in China are next to non existent. A command and control economy cannot count on rising wages due to wealth creation and simple entrepreneurs. There is no Amazon.com in China or Space-X. The Chinese Communists are heavily dependent on manufacturing, and the trade from it, so they NEED foreign dollars to fund their debt monetization in order to avoid massive defaults and the collapse of their banking system and economy.
In short, they need trade with us more than we need to trade with them. If it's costing them more to access our markets and they lose revenues from selling less to us than we sell to them, they're in trouble. Trump knows this, and he knows they cannot sustain a trade war with us, much the same way Reagan knew the Soviet Communists could not hope to keep up with American Scientists and manufacturers of advanced weaponry.
China will fold, and Trump will get a more favorable trade agreement with them. Details on how this will all shake out are linked below. It's also from a Left wing publication so you Socialists shouldn't easily dismiss it.
Enjoy
https://www.thedailybeast.com/why-china-will-lose-a-trade-war-with-trump
Some of you may remember when "the Gipper" squared off with the Former Soviet Union over SDI (strategic defense initiative aka "Star Wars"). Reagan promised to outspend the Bolsheviks in an arms race to Space, knowing their creaky antiquated dilapidated unworkable economy could not keep pace with a nimble, efficient, healthy Free market Capitalistic powerhouse known as the American economy.
Reagan was right, and despite Perestroika and Gorbachev's promises to outperform the American Imperialists, it was clear the failed Socialist bureaucracy could not hang. Americans went to work, our engineers got busy developing new weapons systems and soon the Communists were buried. The Soviet system collapsed under it's own weight and inablity to keep up with American ingenuity and entrepreneurial muscle.
Fast forward roughly 30 some odd years later and Trump similar to Reagan is issuing a new challenge to another group of discredited Communists...the Chinese. Those afraid of or warning of a trade war with China are chasing a false premise. China will lose and Trump knows this.
Some basic understanding of economics makes this true and the facts all line up on Trump's side. China simply cannot outlast the US in a trade war. Chinese money managers cannot afford to continue to float their debt by financing US debt (monetizing) their own because their debt is even more staggering! China essentially relies on interest payments from loans backed by demand for its manufactured goods fed by its cheap labor.
Moreover, they cannot count on an expanding economy raising wages because private Capital expenditures in China are next to non existent. A command and control economy cannot count on rising wages due to wealth creation and simple entrepreneurs. There is no Amazon.com in China or Space-X. The Chinese Communists are heavily dependent on manufacturing, and the trade from it, so they NEED foreign dollars to fund their debt monetization in order to avoid massive defaults and the collapse of their banking system and economy.
In short, they need trade with us more than we need to trade with them. If it's costing them more to access our markets and they lose revenues from selling less to us than we sell to them, they're in trouble. Trump knows this, and he knows they cannot sustain a trade war with us, much the same way Reagan knew the Soviet Communists could not hope to keep up with American Scientists and manufacturers of advanced weaponry.
China will fold, and Trump will get a more favorable trade agreement with them. Details on how this will all shake out are linked below. It's also from a Left wing publication so you Socialists shouldn't easily dismiss it.
Enjoy
https://www.thedailybeast.com/why-china-will-lose-a-trade-war-with-trump
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